A CD ladder spreads money across several certificates of deposit maturing at different times, instead of locking it all into one — a way to capture some of a longer CD’s higher rate while still having money become available at regular intervals.
How it works
Each rung is its own CD — an amount, a rate, and a term — that grows independently to its own maturity date. This calculator totals the principal across every rung, finds the share-weighted average rate, and adds up what every rung is worth once each has individually matured.
Why a ladder trades some yield for flexibility
Longer CDs usually pay a higher rate than shorter ones. Splitting money across several terms instead of putting it all in the single longest, highest-paying CD gives up some of that top rate in exchange for money becoming accessible sooner and more often, without an early-withdrawal penalty.
How to use this calculator
- List each CD as amount@rate@years — for example, “[email protected]@1”.
- Add as many rungs as the ladder has.
Frequently asked questions
What happens when a rung matures?
The common strategy is reinvesting it into a new long-term CD, keeping the ladder going indefinitely — this calculator shows a single pass through to each rung’s original maturity, not an ongoing reinvestment cycle.
Is a CD ladder better than one long-term CD?
It depends on the priority — a single long CD usually earns more if the top rate is meaningfully higher, while a ladder trades some of that for regular access to part of the money.
Does this account for early withdrawal penalties?
No — it assumes every CD is held to its own maturity as entered, which is the point of laddering rather than needing to break one early.
